After reading this story I thought about how interesting it would be for Dragon to start IPOing the subs out:)
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Shanghai Exchange Money Rate Jumps Most in Seven Weeks on IPOs
By Bloomberg News Jan 14, 2015 6:59 PM PT
An interest rate for overnight loans on the Shanghai Stock Exchange jumped the most in seven weeks as investors borrowed cash to subscribe for new share sales.
Initial public offerings will lock up about 2 trillion yuan ($323 billion) this week, according to a Haitong Securities Co. report. The People’s Bank of China didn’t conduct any open-market operations in today’s auction window, according to two traders at primary dealers required to bid at the sales. Repurchase contracts were last offered on Nov. 25 and reverse-repo agreements in January 2014.
The overnight repurchase rate on the Shanghai Stock Exchange jumped 596 basis points, the most since Nov. 25, to 8.98 percent as of 10:42 a.m. in Shanghai. The rate touched 9.30 percent earlier, the highest since Dec. 31. The seven-day repurchase rate, a gauge of interbank liquidity, was steady at 3.82 percent, according to a weighted average from the National Interbank Funding Center.
“Today should see the IPOs biggest impact on exchange repo rates,” said Frank Sun, an analyst at Shanghai CFETS-ICAP International Money Broking Co. in the city. “Still, this round of IPOs didn’t bring any real shock to the interbank market, indicating liquidity in the banking system is still ample.”
Aggregate financing, the broadest measure of credit, totaled 1.69 trillion yuan in December, more than the 1.2 trillion yuan median estimate in a Bloomberg survey, central bank data showed today. New local-currency loans fell to 697.3 billion yuan from 852.7 billion yuan in November.
The cost of one-year interest-rate swaps, the fixed payment to receive the floating seven-day repo rate, rose three basis points to 3.31 percent, according to data compiled by Bloomberg. It touched a one-month low of 3.23 percent yesterday.
